STATUS UPDATE: Investigation into possible violations of privacy and other rights in online money lending industry by the joint task force (FCCPC, NITDA and ICPC)

Pursuant to Sections 17 (a), (e), (g), (h), (i), (m), (s), (x), (y), 18(3); 124; and 127 of the Federal

Competition and Consumer Protection Act (FCCPA), 2018

On March 11, 2022, the Inter-agency Joint Regulatory Task Force (JRTF) in furtherance and pursuant to an Order of the Federal High Court executed a search and seizure Order on certain digital money lenders at different locations in Lagos.

In addition to the search and seizure, the Federal Competition and Consumer Protection Commission (Commission) entered and served Orders on multiple financial institutions freezing and suspending operations with respect to certain accounts that are implicated or otherwise used by some of the money lenders to conduct business.

Evidence procured from execution of the search and seizure Order has led to further investigative activities, including additional discoveries that are material to this active investigation. Specifically, the Commission has secured:

1. Additional locational information beyond Lagos about the same, or other moneylending operations
2. More banking and account information associated with some of the subjects of the investigation
3. Information about staffing and recruiting policies and strategies
4. In some cases, complex web of ownership or corporate relationships with mostly foreign/offshore companies and promoters.
5. Recognized, and unknown payments systems, sources of operational capital, and methods of repatriating business proceeds. 

In continuing the investigation, certain operatives (including foreign nationals) of some operators have been questioned by the Commission during its Investigative Hearings.  The basis and scope of questioning include:

1. The Commission’s continuing undercover surveillance, reconnaissance and intelligence gathering.
2. Discovery that at least one of the money lenders had corruptly secured a public official as an asset to assist with providing critical and sensitive internal confidential information about the investigation; as well as engage in other measures to frustrate the investigation.
3. The Commission is in custody of credible evidence of the planning, discussions, meetings, execution (including tangible evidence of inducement), and participants in this criminal enterprise.
4. The conspirators who all participated have provided useful information and other evidence under caution, and with legal advice.
5. The Commission is considering and proceeding in contemplation and, or preparation of criminal charges and admissible evidence with respect to potential criminal defendants. 

Additional investigative and preemption steps to address the issue include:

1. Additional freezing Orders expanding and increasing the number of accounts and financial institutions involved.
2. Expanded and supplementary Orders to Google Play Store and Apple’s Appstore to draw down additional loan apps.

Although there is sufficient information to show that unethical and unacceptable practices of operatives of the money lenders have not completely abated, the measures taken so far, and evolving landscape shows that recollection/loan repayment practices that defame, intimidate damage consumers is slowing down.

Some of the moneylenders under investigation, or whose bank accounts have been frozen, and others, have approached the Commission and expressed a desire to cooperate and assist the Commission regarding the investigation under the Commission’s Investigative Cooperation/Assistance Rules and Procedure 2021 (https://bit.ly/3DFBXyF). They seek benefit under Rule 4 in exchange for cooperation, assistance and compliance under Rule 3.

As a condition to acceptance into the cooperation/leniency framework, some of the moneylenders have been required to, have agreed, and executed applicable Declarations enforceable under S. 153 of the FCCPA to immediately and forthwith:

1. Cease and desist from contacting, including by text messages, people on contact lists/third parties of borrowers or defaulters;
2. Discontinue further abusive, coercive and inappropriate language in communication with loan defaulters or borrowers;
3. Provide a mechanism for transparency regarding loan repayment fees, default or late payment charges as well as interest calculation to the Commission.
4. The mechanism must include an open, accessible and responsive feedback and dispute resolution framework that complies with fair lending and loan recovery principles as well as acceptable regulatory standards for reconciliation of disputed balance calculations, and complaint resolution.

The Commission reserves the prerogative to proceed in any manner consistent with prevailing law including but not limited to criminal prosecution of any digital money lender, its employees, collaborators or agents, whose conduct has been, or is in violation of extant law.

The Commission is grateful to consumers for diligent cooperation in providing vital and meaningful information that has so far assisted this investigation, and welcomes more.

The Commission is committed to ensuring operators comply with applicable principles of fairness and ethics; as well as holding errant operators, their collaborators, whether individuals, financial institutions, payment systems, technology providers including platforms that accept, host or distribute their apps, or otherwise make them available for download accountable to the fullest extent of the law.